A valuation model from Valhil Capital estimates that XRP's fair market value could soar to $122,580 per token under certain conditions. This figure is based on a comprehensive Collateralization Model that envisions a future where global financial systems are fully tokenized, with XRP playing a central role in collateralizing the worldās wealth.
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š What is the Collateralization Model?
The Collateralization Model was developed by Valhil Capital to calculate XRPās potential value as a universal collateral asset in a fully tokenized financial system. Hereās how it works:
1. Total Global Wealth: The worldās total wealth is estimated at $5.3 quadrillion.
2. Tokenized Economy: The model assumes that by 2030, real-world assets (RWAs) like real estate, derivatives, central bank reserves, and commodities will be tokenized on blockchain networks like the XRP Ledger (XRPL).
3. Risk Adjustment: Applying a 1.25x risk adjustment raises the total estimated value of tokenized wealth to $6.2 quadrillion.
4. XRP Supply: Dividing this value by XRPās circulating supply of 50.7 billion tokens gives a fair market value of $122,580 per XRP.
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š” Why XRP?
The model positions XRP as a store of value and a collateral asset, rather than a simple transactional token. This aligns with recent developments, as Ripple CTO David Schwartz confirmed that the XRP Ledger (XRPL) is moving toward RWA tokenization. This shift could see XRP underpinning the tokenized economy by serving as collateral for global assets.
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š® The Path to $122,580
For this valuation to be realized, several ambitious conditions would need to be met:
Tokenization of All Global Wealth: Real estate, commodities, derivatives, and central bank reserves would all need to be tokenized.
XRP as Universal Collateral: XRP would have to become the global standard for securing tokenized assets.
Widespread Adoption of Blockchain Technology: The worldās financial systems would need to fully embrace blockchain-based tokenization.
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ā ļø Challenges and Considerations
While the Collateralization Model offers an exciting outlook, itās important to consider the challenges:
Technological Barriers: Tokenizing every global asset would require massive technological infrastructure and innovation.
Regulatory Hurdles: Countries and financial institutions would need to embrace blockchain tokenization, which could face resistance.
Valuation Assumptions: The estimate assumes a best-case scenario, and unknown factors could affect the model's accuracy.
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š Current Price vs. Fair Market Value
Currently, XRP trades around $2.40, far below the estimated fair market value of $122,580. However, itās important to note that this valuation is not a price prediction but rather a theoretical analysis based on the assumption of complete global tokenization and XRP's role as a universal collateral asset.
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š Key Takeaways
Valuation Model: XRPās fair market value could hit $122,580 if the worldās wealth becomes fully tokenized.
XRPās Role: XRP would act as the backbone for collateralizing tokenized assets globally.
Current Price: XRP is currently trading at $2.40, well below this theoretical value.
Challenges Ahead: Regulatory, technological, and valuation assumptions pose hurdles to achieving this vision.
While the Collateralization Model paints a bold future for XRP, itās crucial to remember that itās based on theoretical conditions. But as the world continues to shift toward blockchain tokenization, XRPās role in this transformation is one to watch closely.
